Friday, August 30, 2013

No more tightening needed after measures averted housing bubble

Finance Minister Jim Flaherty said he isn’t planning new measures to
restrain the country’s housing market because his past four rounds of
action have already worked to avoid a bubble.

"So far, I’m satisfied that we have a balance in the real estate
sector,” Flaherty told reporters in Wakefield, Quebec, at the start of a
policy retreat with business leaders. “There are some bumps along the
road in Toronto and Vancouver, in particular in the condo markets, but
overall, I’m satisfied,”
Flaherty has warned consumers to avoid mortgages that could become
unaffordable when borrowing costs rise, after Canadians took on record
household debts relative to disposable income.

Flaherty said that “we have been watching the condo market and the
housing market very closely for at least five years.” He also said that
he does have “contingency plans” he can use if the need arises.

The Bank of Canada has identified household finances as the biggest
risk to the domestic economy, while Governor Stephen Poloz has said
there are recent signs of a “constructive evolution” in that area.
Flaherty today also reiterated his own commitment to pare the federal
budget deficit and spoke out against the extraordinary monetary
stimulus seen in the U.S. and Europe.

“We are going to balance the budget without doubt in 2015,” Flaherty
said, adding that this will “put Canada in a position of strength” to
react to any future global weakness.

Feel free to click here to read more about what Flaherty has to say about the budget.